Photo by Sienna Ferraro Shiblie
Special Advertising Feature
Alex Pagnotta | Managing Attorney | Sinclair Prosser Gasior
Alex Pagnotta holds an LL.M. in taxation, focusing on estate planning and estate administration, from New York University (NYU).
What is the estate tax?
A tax applied to the value of your estate when you pass away. Your estate includes everything that you own at the time of your death minus your debts. If your estate is higher than the estate tax exemption, a tax is owed on the excess amount at a rate of 40% (federal) and 16% (Maryland).
What about an estate tax at the state level?
Maryland imposes its own estate tax. If you pass away with an estate valued over $5 million in 2026, the amount above that threshold is subject to Maryland estate tax.
With the recent passing of the “One Big Beautiful Bill,” do I still need advanced estate planning? Yes—and here’s why:
- Since Maryland imposes its own estate tax on estates over $5 million, planning now could save your estate from a significant state-level tax.
- Two key unknowns make planning essential.
a. You don’t know what the laws will be at the time of your passing. The current exemptions apply only if you pass away in 2026. Exemption amounts can change. For instance, if the “One Big Beautiful Bill” didn’t pass, the federal estate tax exemption would have been reduced to $5 million (indexed for inflation). Additionally, Governor Wes Moore’s proposal that didn’t pass would have reduced Maryland’s estate tax exemption to $2 million.
b. You won’t know the value of your assets when you pass. Your assets could grow in value, or you could receive an inheritance, pushing you over the exemption thresholds.
How can you plan for the future when you don’t know what it holds?
Since we can’t predict future tax laws or the value of your estate years from now, here’s how to get started:
1.Calculate the current value of your estate. If you’re anywhere near the federal or Maryland estate tax exemption levels, it’s wise to consider advanced estate planning strategies like a SLAT, ILIT, QPRT, or a charitable trust.
2. Consult an estate planning attorney who can recommend advanced planning tools.
Alex Pagnotta | Sinclair Prosser Gasior 183 Harry S. Truman Parkway, Suite 104 | Annapolis, MD 21401 410-573-4818 | Satellite offices in Bowie, Columbia, & Waldorf
